Is the European Union Going to Help Us Overcome the COVID-19 Crisis?

Abstract

The paper discusses the most noteworthy measures taken or yet to be taken by the EU to combat the coronavirus crisis.

Basically, the measures fall into four categories: (i) flexible application of EU rules that could hinder member states in their strenuous efforts to save their national economies; (ii) a financial support package put in place by the EU itself, (iii) monetary action by the ECB and (iv) action by European financial regulators, including the ECB (albeit in its capacity of banking regulator rather than monetary authority).

This is followed by some comments on the impact of the coronavirus crisis on (i) the intended completion of the European Banking Union, (ii) the plans for a European Capital Markets Union, (iii) Brexit and (iv) the EU climate plans.

The paper concludes that it is clear that the crisis has once again laid bare the divisions between north and south in Europe. These divisions are particularly apparent in relation to the issue of financing the European recovery fund and the power struggle that has now flared up between the German Constitutional Court on the one hand and the CJEU and the ECB on the other. Hard times lie ahead for the EU.

Keywords: COVID-19, corona, EU, ECB, EBA, EIOPA, ESMA, state aid, Eurobonds, coronabonds, ESM, government bonds, capital requirements, NPLs, Europeana Banking Union, Capital Markets Union, sustainable finance action plan, Green deal

JEL Classification: K20, K21, K22, N20